United States District Court, D. Minnesota
Bobby J. Woods, Plaintiff,
K.R. Komarek, Inc., and Brady-McCasland, Inc., Defendants.
S. Sandstrom, Esq., counsel for plaintiff.
P. Hoffman, Esq. and Stinson Leonard Street, LLP, counsel for
defendant K.R. Komarek, Inc.
Stephen M. Harris, Esq. and Meyer & Njus, counsel for
defendant Brady-McCasland, Inc.
S. Doty, Judge United States District Court
matter is before the court upon the motions for summary
judgment by defendant K.R. Komarek, Inc. and plaintiff Bobby
J. Woods d/b/a Controls Plus. Based on a review of the file,
record, and proceedings herein, and for the following
reasons, the court grants Komarek's motion and grants
Woods's motion in part.
commercial dispute arises out of Woods's purchase of
industrial equipment from Komarek on behalf of defendant
Brady-McCasland, Inc. (BMI). Woods is an engineer who
specializes in industrial instrumentation and controls. Woods
Dep. At 7:22-9:23. Woods previously worked at Hosokawa Bepex
where he helped BMI design a control system for its
facility. Id. at 10:2-10; 11:8-16. While
working on the BMI project, Woods met BMI's plant
manager, Alan Johnson. Id. at 26:13-27:3. Woods
later formed Controls Plus, a company that provides
consulting and design services. Id. at 15:14-16:13.
In 2000 or 2001, Johnson asked Woods to help him locate a new
source of manufacturing equipment. Id. at 30:1-20.
Woods recommended Komareck, a manufacturer of custom
briquetting and compacting equipment. Id. From 2003
through 2014, Johnson ordered equipment for BMI from Komarek
and other manufacturers through Woods. Id. at
30:21-32:16. Johnson would place an order with Woods, who
would then order the equipment from Komarek or another
manufacturer for delivery to BMI. Id. at 35:9-37:9.
BMI did not pay the manufacturer directly. Instead, BMI paid
Woods, and Woods paid the manufacturer. See, e.g.,
ECF No. 4 Ex. B; Sandstrom Aff. Ex. 6, at 1-2. Although the
equipment was sent directly to BMI, BMI claims that Woods
represented that he would store the equipment.
in 2005 or 2006, Woods started giving Johnson cash incentive
payments. Id. at 139:2-12. Under this arrangement,
Johnson would request a quote from Woods, who would then
contact a manufacturer to obtain a price. Id. at
47:15-48:18. Woods testified that he would decide how much to
charge BMI solely based on the quoted price. Id. But
he also testified that his prices reflected the value he
added to the transaction such as ensuring that the ordered
parts met BMI's specification. Id. at 55:1-20.
Johnson, who needed approval for the purchases, told Richard
Fox, BMI's owner, that the quoted prices were a
“good price, a fair price, and a fair deal for the
company.” Fox Dep. II at 16:23-17:2. Fox routinely
approved the orders. Fox Dep. I at 30:3-4. Woods would then
pay Johnson 10 to 20 percent of the profits from each order.
Woods Dep. at 114:1-8. From 2011 through 2015, Woods paid
Johnson over $132, 833. See Harris Aff. Ex. C, ECF
No. 27.Fox was not aware of the arrangement
between Woods and Johnson. Woods Dep. at 167:10-12.
specific orders are at issue in this case. First, in January
2014, Woods ordered $32, 170 worth of equipment from Komarek
to be delivered to BMI (First Order). ECF No. 4 ¶ 6;
Id. Ex. A.; ECF No. 12 ¶ 3. It is undisputed
that Woods made an initial payment of $9, 291 but failed to
pay the balance of $22, 879 after Komarek shipped the goods
to BMI. See ECF No. 12 ¶¶ 4-5.
in August 2014, Johnson requested a quote from Woods for
industrial equipment (Second Order). See ECF No. 4
¶ 10; id. Ex. B; ECF No. 12 ¶ 6. Woods
contacted Komarek who offered the equipment at a price of
$278, 550 with a thirty percent down-payment, a thirty
percent mid-way payment, and the balance due within thirty
days after shipment. See ECF No. 4 Ex. B; Compl.
¶ 11. Woods quoted BMI a price of $389, 970, a forty
percent markup, on the same payment terms. See
Sandstrom Aff. Ex. 6, at 1-2. It is undisputed that BMI
accepted the quote and made the initial thirty percent and
mid-way payments to Woods but failed to pay the remaining
balance of $155, 988. See id. at 3; Fox Dep. I at
24:16-25:16. The parties also agree that Woods paid Komarek
the initial thirty percent payment and the mid-way payment
but failed to pay his remaining balance of $111, 420.
See ECF No. 4 ¶¶ 12-14; id. Ex.
C; ECF No. 12 ¶¶ 7-9.
Johnson placed a separate equipment order with Woods in
August 2014 for the quoted price of $75, 960 (Cancelled
Order). Compl. ¶ 25; BMI Second Am. Ans. ¶ 23;
Harris Aff. Ex. F. BMI paid Woods in full before receiving
the equipment with the understanding that Woods would order
the equipment and then store it for BMI. Compl. ¶ 25;
BMI Am. Ans. ¶ 25; Fox Dep. I 15:17-25; Harris Aff. Ex.
F. Sometime after this order, Alan Johnson retired from BMI
and was replaced by Chris Pierce.
3, 2015, Pierce contacted Komarek about the Cancelled Order
and discovered that Woods had never placed an order for the
equipment. See Harris Aff. Exs D, E. BMI also
learned that Woods did not actually store the equipment
despite his representations to the contrary. See
Harris Aff. Ex. F; Fox Dep. I at 13:18-14:9. In his
conversations with Komarek, Pierce also learned that BMI
could buy equipment directly from Komarek at a cheaper
price. Fox. Dep. I at 10:8-12:8; Kelly Decl. Ex.
7 at 6-7. On the same day, BMI canceled its order with Woods,
and it also advised him that it would no longer place orders
with him because he charged a significantly higher price and
misrepresented his involvement in ordering and storing
equipment for BMI. Fox Dep. I at Fox Dep. I at 10:8-19,
12:16-13:22; Woods Dep. at 62:5-11. Woods did not refund any
part of the $75, 960 to BMI. Woods Dep. at 160:20-161:3.
October 21, 2015, Woods filed suit in state court asserting
claims of breach of contract, unjust enrichment, account
stated, and wrongful repudiation of contract against BMI and
declaratory judgment, tortious interference with prospective
economic advantage, and tortious interference with contract
against Komarek. On November 18, defendants timely removed,
and Komarek filed an answer asserting counterclaims of breach
of contract, unjust enrichment/quantum meruit, and account
stated against Woods. On November 24, BMI filed an amended
answer asserting counterclaims of misrepresentation/fraud,
breach of contract, and breach of the covenant of good faith
and fair dealing against Woods. Komarek now moves for summary
judgment on Woods's claims and its counterclaim. Woods
also moves for summary judgment on its breach of contract and
account stated claims and BMI's
Standard of Review
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). A fact is material only when its
resolution affects the outcome of the case. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute
is genuine if the evidence is such that it could cause a
reasonable jury to return a verdict for either party. See
id. at 252 (“The mere existence of a scintilla of
evidence in support of the plaintiff's position will be
motion for summary judgment, the court views all evidence and
inferences in a light most favorable to the nonmoving party.
Id. at 255. The nonmoving party, however, may not
rest upon mere denials or allegations in the pleadings but
must set forth specific facts sufficient to raise a genuine
issue for trial. Celotex, 477 U.S. at 324. A party
asserting that a genuine dispute exists - or cannot exist -
about a material fact must cite “particular parts of
materials in the record.” Fed.R.Civ.P. 56(c)(1)(A). If
a plaintiff cannot support each essential element of a claim,
the court must grant summary judgment because a complete
failure of proof regarding an essential element necessarily
renders all other facts immaterial. Celotex, 477
U.S. at 322-23.
Breach of Contract and Account Stated Against BMI
argues that summary judgment should be granted on his breach
of contract claim, or alternatively, his accounted stated
claim, because it is undisputed that BMI has failed to pay
him the balance of $155, 988 on the Second Order without
justification. BMI responds that there are genuine issues of
material fact as to its affirmative defenses of fraudulent
misrepresentation and equitable estoppel, which preclude
misrepresentation is an affirmative defense to a breach of
contract claim where the party ...